“For example, if poor children grew up in a neighborhood where 70% of their friends were wealthy, their future income on average will increase by 20%, similar to the effect of going to a four-year college.”
ur conversations about economic mobility are often about the individual gaining financial rewards, accumulating wealth, and rising from one income level to the next. This focus on material resources is incomplete because it neglects the relational aspects of success. Local institutions and programs foster this relational dimension by creating new friendships, and other shared connections. This builds social capital among lower and higher income neighborhood residents, boosting economic mobility and the pursuit of opportunity. We have new evidence that this neighborhood economic connectedness across classes, or cross-class friendships, is a major predictor of whether poor children rise out of poverty and move up along the income distribution.
It comes from two reports published in the peer-reviewed multidisciplinary academic journal Nature, and authored by a team led by Harvard economist Raj Chetty, with nearly two dozen others from the National Bureau of Economic Research. Its unique information source is 72.2 million American Facebook users, with at least 100 United states-based friends accessing the site at least once in the prior 30 days, all of whom can be sorted by zip code. That is 84% of American adults between the ages of 25 and 44, with 21 billion friendships.
The analysts estimate individual incomes based on factors that include zip code, education attainment, phone price, and age, linking this with other data sources. The amount of information collected allowed the study authors to develop a detailed analysis of other factors that influence economic mobility, including the high schools and colleges each individual attended. The report includes a website where one can look up their zip code, high school, or college to see how common cross-class friendships are at these locations.
The study authors use three well-established forms of social capital for their analysis: economic connectedness, or the degree to which different people—such as low-income vs. high-income people—engage with each other and become friends; social cohesion, or the degree to which social networks splinter into cliques; and civic engagement, or how often individuals volunteer for community activities and with organizations.
Three Insights from the Reports
First, the strongest predictor of upward income mobility is economic connectedness, or cross-class friendships. This class bridging social capital has a stronger impact on economic mobility than things like school quality, job availability, family structure, or a community’s racial makeup. For example, if poor children grow up in a neighborhood where 70% of their friends are wealthy, their future income will increase by 20% on average, similar to the effect of going to a four-year college.
Second, economic connectedness differs across neighborhoods, with some neighborhoods enabling more income mobility than others, even with individuals who have similar incomes. For example, outcomes are better—even in poorer zip codes—where poor people have more rich friends. And living in places with people of different incomes and backgrounds, who are more connected and engage with each other, causes better economic outcomes. “Areas with high economic connectedness have large positive causal effects in children’s prospects for upward mobility,” the authors write.
Finally, it is natural for us to become friends with those like ourselves, especially those with the same income. “Birds of a feather flock together,” the adage goes. The rich tend to make more friends in college than low-income individuals; while the latter tend to make more friends in their neighborhoods, and middle-class individuals make more friends through work. What influences the creation of friendship networks is roughly a 50/50 blend of exposure to people—especially contact with higher income individuals—and friending bias, the rate at which people go beyond exposure and into engagement, real friendship, with higher income individuals.
In short: Exposure + Engagement = Economic Connectedness
The authors examined six settings where people make friends: high school, college, religious groups, recreational groups, workplaces, and neighborhoods. Recreational groups, the workplace, and especially religious places are strong institutional settings for overcoming a lack of exposure and friending bias.
Career Pathways to Opportunity
In a recent interview, the author C. Nicole Mason offers a poignant comment reflecting a key insight of the Chetty studies: “…a large part of being poor is suffering from a lack of social connection and networks, and living in a low-income area with no infrastructure that enables the leap up to the middle class.”
Career pathways education and training is a promising program infrastructure for creating economic connectedness, or cross-class friendships. This approach builds bridges between education programs and local organizations and enterprises, connecting learners with employers and the labor market. Individuals seeking education and training are exposed to, and engage with, students and adults from diverse backgrounds and classes, outside of their normal social networks.
These programs weave together education, training, employment, and support services to avoid the isolation of the predominant training system from employers and the demands of the labor market. They include apprenticeships, internships, and career and technical education; dual enrollment in high school and post-secondary institutions; career academies; boot camps for acquiring specific knowledge or skills; staffing, placement, and other support services for job seekers.
In a piece I wrote for Merion West earlier this year titled “On a Better Way to Promote Equality of Opportunity in Education,” I discuss how governors and local elected officials from both political parties have joined with nonprofit organizations, employers, civic leaders, and others to support an array of these programs. I included program examples that involve K-12 schools, post-secondary education, and workforce training. Although they assume many forms, their program infrastructures share five common features: an academic curriculum linked with labor-market needs, leading to a recognized credential and decent income; career exposure and work participation that includes regular engagement and supervision with employed adults; advisers who help participants make informed choices and ensure they complete the program; a civic compact between employers, trade associations, and community partners, with written agreements; and supportive policies at the local, state, and even federal levels, to make it all possible, especially in terms of funding.
These pathway programs and the recent analysis by Chetty and his colleagues is consistent with what other experts describe as two types of social capital. Bonding social capital is nurtured in like-minded groups—what Chetty calls social cohesion. Bridging social capital is nurtured in mixed groups, including racially, professionally, and socioeconomically—what Chetty calls economic connectedness. Social scientist Xavier de Souza Briggs observes that bonding social capital is for “getting by,” while bridging social capital is for “getting ahead.”
Money, other material resources, and wealth creation are important aspects of upward mobility and the American Dream. But this new evidence demonstrates that upward mobility, as well as the pursuit of opportunity, are best fostered by neighborhood cross-class friendships, social networks, and other personal connections. Creating local institutions and a program infrastructure that will advance these friendships across class lines is a powerful way to help people achieve upward mobility and pursue economic opportunities.
Bruno V. Manno is senior advisor for the Walton Family Foundation’s education program. He is a former United States Assistant Secretary of Education for Policy.